The central bank has released five basic rights of bank customers in a charter of consumer rights released on 03 December.
The Reserve Bank of India has released five basic rights of bank customers: 1) right to fair treatment 2) right to transparency, fair and honest dealing 3) right to suitability 4) right to privacy and 5) right to grievance redress and compensation in its charter for consumer rights released on December 03.
RBI has initially asked all the scheduled commercial banks, regional rural banks and urban co-operative banks to prepare their own board approved policy incorporating the five basic rights of the charter.
“The charter should also contain a monitoring and oversight mechanism for ensuring adherence. The policy, if needed, would have to be suitably dovetailed with the “Model Customer Rights Policy” proposed to be formulated by IBA/BCSBI,” said RBI.
In its charter, RBI has said that the products offered by banks should be appropriate to the needs of the customer. This has come in the wake of banks increasing focus on distributing third party products. The central banks has said that banks should maintain transparency regarding a product’s price, the associated risks, the terms and conditions that govern use over the product’s life cycle. The customer should not be subjected to unfair business or marketing practices, coercive contractual terms or misleading representations, it said.
To ensure that
customer’s privacy is protected, RBI has asked banks to keep customer’s personal
information confidential unless they have offered specific consent to the
financial services provider.
The central bank has also advised the Indian
Banks’ Association (IBA) and the Banking Codes and Standards Board of India
(BCSBI) to formulate a “Model Customer Rights Policy” encapsulating the
principles outlined in the charter.
